Business-Cycle Conditions

"In 2003, the Federal Reserve Bank lowered the Fed funds rate down to 1.25%. This was the lowest level that the Fed funds rate had been since 1954. Again, the low interest rate gave birth to the housing and credit boom.

"The Fed has access to some of the best economists and analysts in the world, yet they still cannot make correct determinations on the state of the economy. In 2008, they continuously said we weren't in a recession, and there would be no recession.

"The Fed could have sat tight to see whether the slowdown in growth in the second and third quarters of 2010 was temporary. Most of the economic news since the idea of more QE was first floated in August has been better than expected, if not exactly earth-shattering.

"Whether in Republican or Democratic administrations, the Washington policy consensus for a decade has been "print and spend." When that doesn't work, the Washington prescription is to double the dose—more monetary easing and dollar devaluation, and always more government spending.

"Too much money leads first to a boom and then a terrible bust. Re-stimulation continues the process and makes economic imbalances worse over time until finally the whole system begins to collapse and something else emerges. We are in a collapse phase currently.

"To these free-market economists, government intrusion ultimately sows the seeds of the next crisis. It hampers what one famous Austrian, Joseph Schumpeter, called the process of "creative destruction."